Keystone XL on hold, TransCanada turns to natural gas system

CALGARY (Bloomberg) -- While TransCanada Corp. continues to weigh whether to build its long-delayed Keystone XL oil pipeline, the company announced another major expansion of its natural gas system in Alberta.

TransCanada will spend C$2.4 billion ($1.9 billion) to expand its NGTL System, adding 1 Bcf of daily shipping capacity, according to a statement Thursday. The company struck binding agreements with shippers that start in November 2020 and April 2021, with an average contract term of almost 29 years.

The expansion shows TransCanada isn’t sitting still while it considers whether to move ahead with Keystone XL. The company has been proceeding with preliminary work on the $8 billion, 1,200-mi project, but hasn’t officially announced a decision to build it.

TransCanada made no significant new announcements about Keystone XL in its earnings report on Thursday. Profit excluding some items was 82 Canadian cents a share, the company said in a separate statement. Analysts estimated 75 cents, on average.

The shares fell 0.8% to C$53.64 on Wednesday in Toronto. TransCanada has slid 12% this year, compared with an 11% drop for the S&P/TSX energy index.